2 Deals Focus on Big Data and Youth

A COUPLE of deals are shining a spotlight on just how big of a deal big data is becoming on Madison Avenue.

The deals, both for undisclosed financial terms, are to be announced on Monday. They involve companies that specialize in the collection, interpretation and predictive analysis of information about the behavior and habits of consumers, particularly the Americans ages 18 to 34 who are known as the millennial generation.

In one transaction, the Intelligence Group, a division of the Creative Artists Agency, the talent agency in Los Angeles, is being combined with a company, Noise, that also specializes in the young-adult market. In the other, a unit devoted to research into millennials at Barkley, an agency in Kansas City, Mo., is being spun off as a separate consultancy, named FutureCast.

“With the arrival of big data,” the ZenithOptimedia agency writes in a new report about United States advertising, marketers have “a wealth of data points with which to target” consumers. But the sheer bigness of big data can also represent a challenge. Mark Grether, global chief operating officer of Xaxis, a media and technology company owned by WPP, described last week a need to “extract more meaning more quickly from the massive amounts of anonymous big data being generated on a moment by moment basis.”

Noise is part of the Engine USA division of the Engine Group, an agency holding company based in London. The deal is the first acquisition by the Engine Group since December 2010, when it bought Noise.

“I’m a great believer in focus, specific targets and specific demographics,” said John Bernbach, president of Engine USA, and many marketers these days will “do whatever it takes to reach” the millennial audience.

The Intelligence Group — founded in 1996 as Youth Intelligence and acquired by Creative Artists Agency in 2003 — is known for studies about younger consumers that it publishes under the name Cassandra Report. The Intelligence Group has offices in Los Angeles and New York; the Los Angeles office will become the Los Angeles office of Noise and the New York office will be absorbed by the New York headquarters of Noise. (Noise also has an office in San Francisco.)

Two senior executives of the Intelligence Group, Joseph Kessler and Jamie Gutfreund, will take top posts at Noise. Mr. Kessler, who had been president of the Intelligence Group, becomes president and chief executive of the combined Noise, and Ms. Gutfreund, who had been chief strategy officer of the Intelligence Group, becomes chief marketing officer of Noise. (Noah Kerner, who had been chief executive of Noise before the deal, will take the post of nonexecutive chairman.)

“We’re at this moment in time,” Ms. Gutfreund said, when “understanding who the millennials are and why they do what they do” will help advertisers reach a market that accounts for an estimated $2.5 trillion in annual spending. The Intelligence Group has worked for brands that include Disney, Honda, Microsoft, Red Bull and Unilever.

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Jeff Fromm will become president of FutureCast.CreditRon Berg

The sale of the Intelligence Group by Creative Artists Agency represents its second recent deal involving its marketing interests, coming after the company sold back to SS+K, a New York advertising agency, a minority stake in SS+K that it acquired in 1999.

At Barkley, the goal of the youth-focused unit, started in 2010, has been to help marketers contend with “a tsunami of data,” said Jeff Fromm, the executive vice president of Barkley who is becoming president of FutureCast.

One trend the data indicates, according to Mr. Fromm, is that to win among millennials, “marketers have to do more than beat other brands; they have to become a favorite.”

And that extends beyond the millennial generation, he added, to Americans in their 30s and 40s “who are adopting the millennial mind-set.”

Barkley has handled millennial-focused work for brands like Ball Canning, Coleman and the Missouri Lottery. As FutureCast starts, its initial client roster includes Foster Farms and Whole Foods Market. Mr. Fromm will own a minority stake in FutureCast and Barkley will hold a majority stake.

“Jeff was part of the group at Barkley that came up with the idea to have a specific focus on millennials,” said Jeff King, chief executive of Barkley. “He did an amazing job running with the ball.”

“We initially set out to make ourselves experts in millennials for two reasons, to help existing clients and to develop content of interest to potential clients,” Mr. King said. “The demand for that expertise has far exceeded our wildest expectations.”

By establishing FutureCast as a stand-alone company, it will be able to work with marketers that are not Barkley clients, he added, as well as other advertising agencies.

What will be the next big thing after it becomes common to use big data to help determine how to market to millennials? “Today, 10,000 women over the age of 25 are going to have a baby,” Mr. Fromm said, “and again tomorrow.”

Those babies, along with children who are younger than millennials, compose a demographic group that Mr. Fromm calls “Generation Next, or the Plurals,” for reflecting their multiculturalism. Other terms used to describe that cohort are post-millennials and the pluralist generation.

A version of this article appears in print on , on Page B8 of the New York edition with the headline: 2 Deals Focus on Big Data and Youth. Order Reprints | Today’s Paper | Subscribe